Smiths Group shares surge on upbeat outlook

Investing.com — Shares of Smiths Group (LON:) jumped over 12% on Wednesday after the company raised its full-year outlook following its strong first quarter performance. 

RBC Capital Markets analysts, who had projected more modest growth, attributed the upward adjustment primarily to strong growth within Smiths Group’s Interconnect and Detection segments.

Smiths Group reported a 13% year-over-year organic sales increase in Q1, this growth was driven by a demand in its Detection unit and a 30% organic growth in Interconnect. 

The jump in Interconnect sales reflects a recovery in semiconductor-related end markets, which could boost the Group’s results through FY25. 

Detection’s performance, however, appears tied to a timing boost from upgrade order deliveries, which were notably strong this quarter.

As a result of these gains, Smiths raised its annual growth outlook to a range of 5-7%, compared to an earlier forecast of 4-6%. 

The company also projected a margin expansion of 40-60 basis points, a slight increase from prior estimates. 

RBC analysts flagged that while Smiths’ revised guidance aligns with consensus forecasts, it signals cautious optimism, particularly in the context of an uncertain economic environment. 

With the increase in its share buyback program to £100 million, Smiths Group appears to be strategically reinforcing shareholder value, positioning itself for sustainable growth even amid industry pressures.